News & Views

Many Scottish politicians and commentators lament the lost opportunity of following Norway’s lead and creating a sovereign wealth fund to fuel that renewal. In a generation, the $1.2 trillion fund has become a global colossus, owning 1.5% of the world’s publicly traded companies. Norway’s success follows a tried and tested formula for the reinvention of small, often peripheral, European nations of combining disruptive technologies, in this case deep-water oil extraction technologies, with national institutional innovation.

In the fifteenth century, Portugal combined new navigation and maritime technologies with institutional innovation to become the first global trading nation and, in the 1990s, Finland and Ireland allied ICT and institutional reforms to rapidly re-orientate and globalise their economies. Norway is now well placed to achieve a “just transition” by utilising the same formula.

For Scotland, it is a dispiriting comparison, especially given the role of past energy transitions in national development: coal in the Central Belt; hydro in the Highlands; and oil and gas on the East Coast.

Time is short if Scotland is to seize the epochal prize offered by energy transition. In 2021, the Scottish Government’s Just Transition Commission will report and the eyes of the world will be on Glasgow for COP 26. In late 2020, the Scottish Government published its revised Climate Change Plan for a green recovery which, on its own admission, is still “evolving”. There is no better time to reimagine current practice and strike the vital spark of institutional change plus disruptive technologies.

The prize: deferred or lost?

It is a decade since the Scottish Government set the target of 100% of gross national electricity consumption from renewable sources by 2020: a bold, successful commitment that has made Scotland a global reference. However, only a fraction of the tens of thousands of related jobs that were anticipated, especially regarding offshore renewables, has materialised and the industrial renaissance required for a “just transition” is missing.

This lost decade was capped in 2020 by the cessation of activities at large renewable energy manufacturing sites (BiFab on Lewis and in Fife and CS Towers in Kintyre). In June 2020, Crown Estate Scotland launched ScotWind, a seabed leasing regime that aims to link new offshore wind projects to enhanced national procurement. Given that the international supply chain is now consolidated, and incumbents are dominant, it is hard to see how this new leasing regime will markedly move the dial.

The missed opportunity is not only economic. Decarbonisation offers Scotland a unifying mission that can decouple national advancement from constitutional circumstance and promote a parallel platform for consensus and collaboration among many and varied players. Such a significant, collective mission can mitigate the divisive effects of majoritarian politics, whether from Westminster or Holyrood, on Scottish society, now and in the future. Moreover, the mission will facilitate a redesign and revitalisation of Scotland’s institutional architecture and capacity (which has been depleted through austerity, the evisceration of the manufacturing and financial sectors, the decline of trade unions etc.). It can, what’s more, provide the basis for an independent Scotland if this route is chosen by its people.

As Fintan O’Toole, the Irish commentator, contends, a new Scotland is not waiting to be unveiled after a positive referendum. The foundations need to be laid now.

The prize is not lost yet but it is in jeopardy. Evolving technologies, such as wave and tidal energy, in which Scotland is a global leader, still offer promise for the nation. However, if Scotland is to realise these opportunities at scale, it needs to learn from the lost decade.

Lessons to be learned

The route from policy intent to policy delivery is difficult. Critically, Scotland has not found its own successful way of combining disruptive technologies with institutional innovation, the formula for the reinvention of small nations. This is not a new phenomenon; the collapse of Silicon Glen is another notable manifestation of this inability. Significantly, the absence of a renewables-led industrial revival has occurred post-devolution, illuminating the chronic nature of the condition.

This failure cannot be wholly blamed on the Union. European regions, in Belgium and Spain, have achieved economic renewal within fractious national political structures. Three lessons can be discerned.

First, the mercurial conditionality of corporate-led transition is evident. Scottish politicians and policy makers for the last 50 years have placed too much belief and resource in a top-down model of industrial development that is contingent on the vested interests of a narrow set of corporate actors. When just a few utility and international manufacturing companies drastically scaled back or abandoned their Scottish offshore wind plans, given the changed UK subsidy regime, the Scottish Government’s ambitions effectively stalled in the water. There was no Plan B. The Scottish Government is now working in close partnership with the oil and gas industry to finance technologies that are in the interests of this carbon-based sector (non-green hydrogen, carbon capture and storage etc.).

Second, Scotland has not boldly used all the institutional powers at its disposal to generate and safeguard national demand for innovative renewable energy technologies. Rather, Scotland placed too many of its policy eggs in the UK subsidy basket, over which it had limited control; when the regulatory regime became less generous, market contraction choked corporate investment. Had Scotland pursued a more bottom-up, less centralised approach (using its powers across agriculture, education and research, housing, infrastructure, land-use, transport, urban and rural development), a sustainable and sheltered market for renewable technology adoption could have been fostered.

Third, the narrow focus on corporate actors and a narrow dependence on one regulatory incentive, the Renewables Obligation scheme, is synonymous with limited systems thinking. Scotland needs to develop an approach to policy analysis and prescription that responds to the peculiarities of the nation, its specific capacities across government, industry and civil society, and the multi-actor conditionality of profound societal change. When you scratch the surface of successful small European nations, it is the peculiarities that strike you, not the similarities. Jean-Jacques Rousseau’s observation that “the general objectives of all institutions must be adapted to local conditions” has stood the test of time.

Denmark: It’s cool to be abnormal

A decade ago, Denmark, a country with a similar population size as Scotland, committed to 100% of electricity from renewable sources by 2035, fifteen years later than Scotland. Yet, the country has created tens of thousands of quality jobs in the renewable energy sector and is a major global exporter of related manufactured products and services. Denmark’s model of development has successfully combined the disruptive technology of wind energy with institutional innovation. A key feature of its approach has been the distributed nature of power and agency across multiple government, private, research and social actors at national and local levels and the tactical responsiveness of its institutions to both national and international opportunity and threat.

Denmark created a sustainable top-down/bottom-up development model that future-proofed technology push and demand pull, in a dynamic and uncertain global market, based on its own specificities and capacities. There was always a Plan B.

Securing the prize

If Scotland is not to repeat a lost decade and realise the economic opportunities of energy transition, at scale, it needs to reimagine its approach. The nation needs to find its own successful way of combining disruptive technologies with institutional innovation, the enduring formula for the reinvention of small nations. Three institutional developments can contribute to this process of national renewal.

Establishment of a Transition Convention – The Convention would aim to align multi-actor action, foster trust and collaboration, and develop a common national vision, narrative and blueprint for combining technological and institutional change to enable successful transition. The Convention can be launched during the COP 26 in Glasgow, thereby offering a unique Scottish perspective on the shared global mission of decarbonisation and placing the nation’s ambition in an international context.

Adopting Systems Orientated Policy and Practice – Adoption of a systems approach would promote synchronisation of dispersed power, agency and resources across Scotland’s public, private and social actors to facilitate and promote a just, successful and sustainable transition. It will also enable the co-ordination of public policy, resources and action, with wider societal resources and capacities, across and between levels of government.

Establishing a National Academy of Development and Transition – The academy would act as a mechanism for developing capacity for national renewal based on decarbonisation in Scottish government and across diverse socio-economic actors. It would foster a national, yet dispersed cadre of agents of change with the skills, competences and behaviours to better understand, facilitate and manage the critical interplay of institutional and technological innovation. The academy would also act as a platform for interface with other nations and international organisations which are also dealing with this time-critical challenge.

Transition’s prize of national renewal can still be won but we need to change our game plan, fast.